(a) A municipality that establishes a program under AS 29.55.100 may

(1) enter into a written contract with a record owner of privately owned commercial or industrial property in a region designated under AS 29.55.100 to impose an assessment to repay the financing of an energy improvement project on that property;

(2) contract with the governing body of another taxing unit to perform the duties of the municipality relating to collection of assessments imposed by the municipality under this section.

(b) Financing repaid by an assessment may

(1) be provided by a third party under a written contract with the municipality that authorizes the municipality to service the debt by assessment; or

(2) if authorized by municipal ordinance, be provided by the municipality.

(c) An assessment under this section may repay financing for costs of an energy improvement project, including

(1) the cost of materials and labor necessary for the energy improvement project;

(2) permit fees;

(3) inspection fees;

(4) lender's fees;

(5) program application and administrative fees;

(6) energy improvement project development and engineering fees;

(7) third-party review fees, including verification review fees, under AS 29.55.120; and

(8) any other fees or costs that may be incurred by the property owner incident to the installation, modification, or improvement on a specific or pro rata basis, as determined by the municipality.

(d) An assessment under this section may not repay financing for the costs of

(1) facilities for undeveloped lots or lots undergoing development at the time of the assessment;

(2) the purchase or installation of products or devices not permanently fixed to the privately owned commercial or industrial property; or

(3) a utility's purchase or installation of a product, device, or improvement, if the product, device, or improvement will generate electricity or provide thermal energy distributed or used outside of the assessed property; in this paragraph, “utility” has the meaning given in AS 42.05.990.

(e) A municipality may establish more than one region. The boundaries of each region may be separate, overlapping, or coterminous.

(f) A municipality may not impose a period of assessment under this section on privately owned commercial or industrial property that exceeds 20 years or the useful life of the project that is the basis for the assessment, whichever is shorter.

(g) Except as otherwise provided in (h) of this section, the total financing repaid by assessments

(1) may not exceed 20 percent of the assessed value of the property at the time of program application;

(2) must be exceeded by the projected monetary savings to the property owner over the life of the assessment as a result of the energy improvement project.

(h) If the total financing repaid by assessments does not exceed 50 percent of the assessed value of the property at the time of program application, the property owner may apply for a waiver from the municipality to exceed a limitation under (g) of this section. A waiver application under this subsection must

(1) include a reasonable justification acknowledged in writing by the property owner and the party providing the financing to be repaid by the assessment; and

(2) for a waiver from the limitation in (g)(2) of this section, address the interests of potential tenants and future property owners.